SGR Reform Looks Closer than Ever

WA﻿SHINGTON -- Republicans and Democrats on the House Energy and Commerce Subcommittee on Health were in rare unanimous agreement Thursday during a hearing on the Medicare sustainable growth rate (SGR) payment formula.

"Let's all accept the premise that SGR has to go," said Republican Rep. Michael Burgess, MD, of Texas. "We need a permanent solution that is reasonable, updatable, and only that will do."

The formula used to determine how Medicare reimburses physicians needs to go, agreed members of Congress and witnesses at the hearing. And it needs to be replaced with a fair payment method that covers what it costs to treat Medicare patients, but also gives the physicians a little profit.

The SGR formula ties physician reimbursement to the gross domestic product; it has called for cuts in pay every year since 2002. Both sides have agreed for years that the formula needs to be changed, and, still, Congress is constantly rushing to stave off cuts at the last minute that would make huge slashes to what doctors are paid by Medicare.

At the 11th hour, a stopgap bill always passes, holding steady the fees that Medicare pays doctors for treating the sick and elderly. Then the debate resumes again, and another stopgap eventually passes.

So if there is so much agreement that SGR needs to go, why has no comprehensive, bipartisan bill passed?

Time on the legislative calendar has always run down before tackling a broader Medicare payment bill, Burgess told MedPage Today following the hearing. But this time, if the Energy and Commerce Committee approves SGR reform legislation in June, perhaps the bill could actually pass the full Congress before August recess, Burgess said.

A number members of Congress and witnesses at the hearing -- five out of seven of whom were doctors -- said Thursday that the time may be more ripe than ever for reforming the SGR system given the current focus on reining in Medicare spending.

One witness, Cecil Wilson, MD, president of the American Medical Association (AMA), called for replacing the SGR with a five-year period of stable Medicare physician payments that keep pace with the growth of medical practices. Eventually, Medicare should transition to "an array of new payment models to enhance care coordination, quality, appropriateness, and costs."

Former CMS Administrator Mark McClellan, MD, PhD, told members of Congress not to just readjust the SGR when the law expires in 2012.

"As Congress considers how to address the SGR problem this time around, I urge the subcommittee to look beyond approaches that remain tied to the existing formula simply by delaying it again, or by resetting baselines to higher spending levels," he said. "Rather, this is an opportunity to provide better support to physicians who lead in improving care."

Panelists and members of Congress all agreed the traditional fee-for-service model needs to be abolished.

"This dilemma touches on the fundamental problem with fee-for-service -- i.e., payment is based solely on what procedure is provided to the patient, not the value of the service provided, and thus encourages volume growth," said Roland Goertz, MD, president of the American Academy of Family Physicians.

The panel of witnesses told members of Congress it would like to see the SGR scrapped and payments held steady for five years while various new payment models are tested out, including accountable care organizations. Ultimately, physicians and hospitals should be able to choose the payment model that best suits them, Wilson told MedPage Today.

Everyone at the hearing said it's crucial that physicians have the main leadership role in bringing about changes in payment, and not insurance companies, hospitals, or the government.

While there is widespread agreement on dislike of the SGR, that's not to say there are no bipartisan disagreements over reforming how doctors are paid under Medicare.

One major disagreement -- which strikes at the core of the Medicare program -- is that Republicans would like doctors to be able to negotiate payments with Medicare patients. So a wealthy patient could technically pay more than the Medicare rate, or not use their Medicare benefit at all and pay out-of-pocket.

It could go the other way, too, where a doctor could accept a payment of less than the Medicare rate, or a freshly baked pie even, as payment for medical treatment.

Currently, if doctors accept something other than the Medicare rate from their Medicare patients, they could face fines and even criminal prosecution.

Getting a far-reaching Medicare payment reform bill through both chambers of Congress may again prove elusive, but Burgess said he's holding out hope that maybe this will be the year when Congress can finally stop racing against the clock to block cuts, only to have to face the issue again several months later.

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